Correction: An earlier version of this article misidentified Libby Boyd, Pedal to Properties broker.

The components were there for a housing rebound in Boulder County: historically low interest rates, a relatively insulated market during the recession, population influx, economic growth, tight multifamily market, low inventory and pent-up demand.

Local real estate observers projected an increase in home sales.

Not all predicted the fever pitch.

Nearly halfway through 2013, that perfect storm bred a sellers' market in Boulder County with "auction-like conditions" in which multiple offers and fast sales are commonplace. Prices of homes sold in some local cities have seen double-digit gains over last year.

The resurgence within the existing home sales market helped spur green lights on some housing starts -- most notably in Erie, which has plans to nearly double its 21,000-person population in a dozen years.

"The hard data of measurables are all the same as they were in 1991 when Boulder County prices rose almost 40 percent in the next three years," said Lou Barnes, a mortgage broker with Premier Mortgage Lending in Boulder. Barnes, a renowned "credit-market oracle" nationally, serves as a member of the Daily Camera's Editorial Advisory Board.

Credit is as "over-tight" now as it was "over-easy" during the bubble days, and has not returned to the pre-bubble baseline, Barnes said. That dynamic may continue to limit some potential buyers, but it also may tame wild price gains that could choke off demand.

"Our price rises will be limited by underwriting and appraisal rigor ... in exchange, the increase may last longer," he said.

In late June, on the heels of Federal Reserve Chairman Ben Bernanke's remarks that the Fed may ease up on its bond purchases, interest rates for 30-year fixed mortgages shot up a half of a percentage point in a week's time to 4.46 percent, according to Freddie Mac.

Dennis Tracy, center, Kristy Peterson and Botsy Phillips talk about the furnace at a home inspection in Longmont last week. Halfway through 2013, the housing market has not just rebounded, it s red hot in Boulder County, with homes selling fast, often above asking price.
(
MICHAEL WILSON
)

It was the highest weekly increase since April 1987 and the highest rate posted since June 28, 2011.

Barnes expressed optimism that the housing turnaround on Colorado's Front Range area between Castle Rock and Wyoming and bordered by Interstate 25 on the east could withstand further rate climbs.

"The local fundamentals are so strong -- as strong as any in the country -- that our market conditions can continue through a greater interest rate rise," Barnes said.

Selling fast

Tim Shea, owner of Boulder real estate agency Pedal to Properties, said the recent months' activity has been "nothing like I've ever seen before."

"There are certain properties, if they're in a very good neighborhood and highly sought after, it's a type of situation where people are getting multiple offers on their properties within hours -- within a day at the most," said Shea, who has been involved in the Colorado real estate industry for more than 20 years.

It took five days between listing and contract for Mackenzie and Ted Holland's east Boulder condominium.

After a multiple-offer situation, the condo sold for $240,000, slightly above their asking price of $239,000, said Libby Boyd, the Pedal to Properties agent who represented the Hollands.

The timing and quickness of the sale were fortunate because the couple needed to move out of state for a job, said Mackenzie Holland, 32.

"We were hoping that it would go very quickly," she said.

The two years prior, that wasn't necessarily the case.

When her husband finished his Ph.D. and started searching for teaching jobs, the states of the housing market and economy were unsettling, Holland said.

"When the market wasn't so good, we were a little worried we weren't going to break even," she said.

'Significant jumps'

D.B. Wilson, a manager and broker associate with Re/Max of Boulder, said the 10 "vital statistics" he tracks -- including active listings, sales price to list, inventory and expired listings -- all are moving in the appropriate direction to signal a strong real estate market.

Construction crews work on the Flatiron Meadows housing development on Erie Parkway near County Road 3 in Erie last week.
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JEREMY PAPASSO
)

Through May, the median price of homes sold in Boulder County was $410,000, an increase of 7.9 percent from the same period a year earlier, according to Wilson's analysis of International Real Estate Society data.

"Across the board, we're seeing pretty significant jumps," Wilson said, noting initial mid-year numbers show that Boulder had a 12 percent increase in median and average sales prices and Louisville is posting median and average gains of 23 percent and 18 percent.

In Boulder County, the sales price to list price ratio increased to 97.3 percent and the average market time shrunk to 86 days, a decline of 24.6 percent.

"Obviously, we had a great deal of pent-up demand," Wilson said. "We did not experience the bubble that the rest of the nation did, so we did not have huge price reductions. We did not lose a significant amount of value in our home values, while the rest of the country did."

Colorado also has fared better than most of the nation in clearing through its delinquencies.

In Colorado, 4.7 percent of mortgage loans outstanding are delinquent in some fashion, according to Lender Processing Services' May 2013 Mortgage Monitor.

Nationwide, that average is 9.4 percent.

Five states -- North Dakota, South Dakota, Alaska, Wyoming and Montana -- have a percentage lower than Colorado's rate.

While Colorado's momentum is strong, interest rate rises may take some wind out of the sails, Wilson said. For every 1 percentage point gain in interest rate, one could lose $50,000 in buying power, he said.

New development

Rising interest rates should not muffle continued housing growth on the Front Range, Barnes said, noting that rates in the 4.5 percentile remain below historical averages.

Working in Colorado's favor is a combination of relative affordability and a mismatch between population growth and the slowing of new construction during the recession.

The state's population grew by 800,000 people in 11 years. The crest for building permits was in 2001, and, by 2009, had fallen about 90 percent, he said.

"We are, still, on a monthly basis, well under half of the peak, which means we're not catching up."

When the housing bubble burst, it took down several impending projects and -- in some cases -- their developers.

Michael Markel, founder of Boulder-based Markel Homes, said he feels fortunate that his firm not only weathered the recession, but also continued to sell homes during that time.

"Boulder held up pretty well, but I consider it -- after working here for 40 years -- it was one of the more difficult recessions in the Boulder area," Markel said. "The big bounce-back is a real pleasant surprise."

Markel Homes' North End development in Louisville in a sense epitomizes some of the effects of the downturn and the subsequent rebound.

When the 350-home project off South Boulder Road and Highway 42 broke ground in 2008, Markel anticipated the project would be complete by 2014 or 2015.

"We didn't anticipate a three- or four-year recession," Markel said.

The downturn resulted in a slowing of the build-out of the 217-home first phase. Price concessions, customizations and incentives were tools used to help get buyers in the homes.

Five years later, the market has grown firm enough for the second phase, Markel said.

Of the 143 residential homes targeted for the North End Phase II, 80 will be single-family dwellings.

"That's what we're sort of dialed in on right at the moment," he said.

The houses, which include a dozen different models, range in size from 2,500 square feet to 4,000 square feet, including basements, and will be priced in the low $400,000s to $600,000s.

"We're creating an interest list and we've got quite a few people on that list," Markel said.

'We've planned for it'

The wealth of the new development activity is in Erie.

The town of 21,000 people and 7,000 dwelling units has a comprehensive plan that is prepared for a population of just under 41,000 people by 2025.

"Erie's the only meaningful patch of buildable land left in the county," Barnes said. "In prior expansions, all the way to the arrival of the miners, when Boulder got hot, there was some place to go to.

"And now we're out of land."

Erie's town board this year gave the go-ahead for the first phase of the massive, 2,880-home DayBreak residential development.

As the Earth-moving equipment already is readying the land off Erie Parkway and Bonanza for DayBreak, construction is under way on the 875-home Flatiron Meadows development off North 111th Street and Isabelle Road; the 420-home Erie Village, off Bixler Road; and the 770-home Erie Commons, off Erie Parkway and County Line Road.

Erie officials anticipated that 150 permits would be pulled for 2013, said Fred Diehl, assistant to Erie's town administrator.

Officials already had to revise that figure to 200, noting that 153 permits were pulled to-date.

Community Development Group, the Boulder-based firm behind Erie Commons and DayBreak, is not expected to begin construction on DayBreak's houses until 2014, Diehl said.

The demand is there, Diehl said, as is the preparedness.

"We have the infrastructure," he said. "We have the water. We've planned for it. We've invested wisely."

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